TEXACO OVERSEAS PVT LTD vs. ACIT, CIRCLE 25(1) & ANR.

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W.P.(C)/5512/2020HC DelhiDLHC01022689202021 August 2020Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MR. JUSTICE SANJEEV NARULA3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, after hearing arguments from both sides, disposed of the writ petition with the consent of the parties. The Court directed the respondents to decide the petitioner's rectification applications dated 28th July, 2020, 6th August, 2020, and 11th August, 2020, filed under Section 154 of the Income Tax Act, 1961, within six weeks from the date of the order. The Court explicitly stated that all rights and contentions of the parties were left open, meaning no final decision was made on the merits of the refund claim or the disputed demands. The operative direction was to process the pending applications within a stipulated timeframe.

What were the facts?

The petitioner, Texaco Overseas Pvt Ltd, filed a writ petition seeking a refund of Rs. 5,76,770/- determined under Section 143(1) for Assessment Year 2013-14, along with interest under Section 244A. The petitioner also sought the deletion of demands for Assessment Years 2010-11 (Rs. 22,44,970/-) and 2008-09 (Rs. 1,19,280/-) based on orders under Section 143(3). Additionally, a demand of Rs. 78,305/- for Assessment Year 2009-10 was sought to be deleted by allowing credit for Rs. 67,380/- already paid. The petitioner contended that the refund was adjusted against outstanding demands without a show cause notice under Section 245, and despite rectification applications under Section 154, the refund had not been granted.

What were the issues?

1. Whether the respondent can refuse to grant a refund determined under Section 143(1) of the Income Tax Act, 1961, which was initially adjusted against outstanding demands that were subsequently reduced to 'Nil' and still appeared in the system? (Question of law and fact, concerning Section 143(1) and Section 245 of the Act, 1961). Assessee's Contention: The respondent cannot withhold the refund determined under Section 143(1) merely because it was initially adjusted against outstanding demands that were later reduced to nil. The adjustment was made without issuing a show cause notice under Section 245 of the Act, 1961. Despite applications under Section 154, the refund has not been granted. Revenue's Contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 244A,Section 143(3),Section 245,Section 154

AI-generated summary — verify with the full judgment below

W.P. (C) 5512/2020

Page 1 of 3

$~1 * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ W.P. (C) 5512/2020

TEXACO OVERSEAS PVT LTD

...... Petitioner Through: Mr. Mukesh Gupta, Advocate.

versus

ACIT, CIRCLE 25(1) & ANR.

...... Respondent Through: Mr. Abhishek Maratha, Senior Standing Counsel with Mr. Pratayash Gupta, Ms. Nupur Sharma and

Mr. Anshul Sharma, Advocates.

Date of Decision: 21st August, 2020

CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MR. JUSTICE SANJEEV NARULA

J U D G M E N T MANMOHAN, J: (Oral) CM APPL. 19833/2020 Allowed, subject to all just exceptions. W.P. (C) 5512/2020 1. The petition has been listed before this Bench by the Registry in view of the urgency expressed therein. The same has been heard by way of video conferencing. 2. Present writ petition has been filed seeking refund of Rs.5,76,770/- determined vide order dated 27th March, 2015 under Section 143(1) of the

W.P. (C) 5512/2020

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Income Tax Act, 1961 (hereinafter referred to as ‘Act, 1961’) for the Assessment Year 2013-14 along with interest under Section 244A of the Act, 1961 as well as for deleting the demands of Rs.22,44,970/- for Assessment Year 2010-11 and Rs.1,19,280/- for Assessment Year 2008-09 in pursuance to the orders dated 25th November, 2016 and the order dated 25th November, 2010 respectively under Section 143(3) of the Act, 1961. Petitioner also prays in accordance with its letter dated 22nd May, 2015 for deletion of demand of Rs.78,305/- for Assessment Year 2009-10 by allowing credit of Rs.67,380/- already paid by it. 3. Learned counsel for the petitioner submits that the respondent cannot refuse to grant refund determined under Section 143(1) of the Act, 1961 on the ground that it had been initially adjusted against outstanding demands but which had subsequently been reduced to ‘Nil’ and yet found uploaded in the computer system. He further states that the refund had been adjusted/offset without issuing any show cause notice under Section 245 of the Act, 1961. 4. Learned counsel for the petitioner states that despite applications dated 28th July, 2020, 6th August, 2020 and 11th August, 2020 under Section 154 of the Act, 1961 the respondents have till date not granted refund of Rs.5,76,770/-. 5. Issue notice. 6. Mr. Abhishek Maratha, learned counsel, accepts notice on behalf of the respondents. 7. After some arguments, with the consent of the parties, the present writ petition is disposed of with a direction to the respondents to decide the petitioner’s rectification applications dated 28th July, 2020, 6th August, 2020

W.P. (C) 5512/2020

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and 11th August, 2020 under Section 154 of the Act, 1961 within six weeks in accordance with law. All rights and contentions of the parties are left open. 8. The order be uploaded on the website forthwith. Copy of the order be also forwarded to the learned counsel through e-mail.

MANMOHAN, J

SANJEEV NARULA, J AUGUST 21, 2020 sb

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